By Brian Proffitt
Managing Editor
Hard on the heels of a multi-million dollar second quarter loss,
Novell may be planning some significant staff cutbacks, likely in
its European offices.
It is not clear whether the SUSE Linux division, located in
Nürnberg, Germany, will be the sole target for the
layoffs. Sources close to Novell employees in Europe have indicated
that non-SUSE divisions in Europe have been asked to cut back, as
well.
One Novell manager in Europe was apparently asked to reduce
staff by 25 percent. It is not known if this percentage figure is
universal across every department.
The exact timing for the layoffs is also not known but may be at
the end of this month, according to a Novell employee.
These layoffs, if they do occur, would be a natural defense
against Novell’s 2Q loss of US$16 million, which the Waltham,
Massachusetts-based company announced May 26. Novell’s report
identified declining sales of their older Netware software business
coupled with just a six percent rise in sales on the Linux side of
the business as a significant contributor to their loss. Linux
sales figures actually rose six percent, not fell 25 percent. This
was corrected based on information from Novell. My apologies for
the error -BKP
Specifically, European sales figures were specifically targeted
as a problem, which lends credence that this move is not just
targeting the SUSE Linux division. The company’s positive public
stance on Linux as its future salvation is another indicator.
In his conference call announcing the 2Q results, Novell CEO
Jack Messman was still very positive on Linux, citing recent sales
to the US Department of Health and Human Services and several
Fortune 500 companies, including Circuit City and Toronto-Dominion
Bank in Canada.
Novell has made it well known that their future depends on the
success of their Linux sales, and that this time of transition from
one business to another is going to be the roughest part of their
road ahead.
But while Novell seems to be making cost-cutting measures across
the board and not just targeting SUSE, it is not clear how SUSE
Linux employees and management are enjoying life under the Novell
banner.
Recent departures from Novell include former SUSE Linux head
Richard Seibt, vice chairman Chris Stone, and chief technology
officer Alan Nugent. Many SUSE employees’ stock options from the
Novell purchase have recently become vested, giving outside
observers another potential indicator on overall employee
satisfaction.
When contacted for comment, Novell’s Director of Press Relations
Bruce Lowry said, “Novell does not comment on any rumors or
speculation that’s out there.”